891 Returns of interest paid or credited without deduction of tax

Summary

This section gives Revenue the power to obtain from banks and other concerns (including the Post Office Savings Bank) which pay or credit interest without deduction of income tax, information as to the recipients of such interest and the amounts paid or credited to them where such amounts in the return period exceed €65.

Details

(1) Every person carrying on a trade (particularly banking) or business who, as part of that trade or business, receives and retains money and pays or credits interest on that money without deduction of tax must, when requested to do by an inspector, make a return of the interest so paid or credited. The inspector may also seek a return from any part of a trade or business.

The return, which must be made within the time limit specified in the inspector’s notification, must contain —

• the name and address of each person to whom interest was paid or credited, and
• the amount of such interest.

(1A) The section does not apply to credit unions except in relation to any interest paid or credited in respect of interest to which subsection (1A) or (1B) of section 256 applies (i.e. DIRT exempt deposits for individuals aged 65 years or over and those who are permanently incapacitated where their income falls below certain limits. This was provided for in the Finance Act 2007).

(2) Interest not exceeding €65 (in practice this amount is adjusted to €635 [Statement of Practice SP-IT/1/92]) to any one person in a year need not be returned and the inspector cannot seek details relating to a tax year ending more than 3 years before the date on which the inspector issues his/her request.

(3) While the section allows an inspector to request information from any part of a trade or business, it also allows an inspector to request information from a branch or branches of a trade or business and any notice served on a manager or other person in charge of the branch(es) has the same effect as if it was served on the person carrying on the trade or business. Information given by a branch of a trade or business need not be returned with the information given by the person carrying on that trade or business.

(4) This section applies to the Post Office Savings Bank.

(5) The foregoing applies only to money received or retained in the State.

(6) A depositor may by notice in writing request a bank or other financial institution not to include interest paid or credited in a return of the Revenue Commissioners on the grounds that the person beneficially entitled to the interest was, at the time it was paid or credited, not resident in the State.

If the bank or other financial institution is not satisfied that the person is non-resident, it may request an affidavit stating his/her name, address and the country in which he/she was resident at the time the interest was paid or credited.

If the person making the affidavit was not entitled to the interest when it was paid or credited, the affidavit must also state the name and address of the person who was so entitled and the country in which he/she was resident when the interest was paid or credited.

If the bank or other financial institution is satisfied that the person seeking not to have the interest paid or credited included in a return of the Revenue Commissioners was non-resident at the time the interest was paid or credited and that person declares that the person beneficially entitled to the interest at the time it was paid or credited is resident in the State, he/she must give the name and address of the beneficial owner.

(7) Any person who pays interest is obliged to keep, for 6 years, details (and accompanying affidavits) of notices from depositors requesting that the interest not be returned to Revenue. The deposit holder must also give, when requested by Revenue, copies of such documents.

Relevant Date: Finance Act 2019